If there is one thing mineral resource-rich countries in African can learn from the sluggish state of the commodities market is the risk of an economic model that is over reliant on extractive mining.
This is what Seth Akweshie, Southern African Development Community (SADC) industrialisation adviser, observed, in his keynote address at the Cross-Border Mining Services Indaba at the Johannesburg Country Club the past week.
Akweshie commented, “Our reliance on the mining sector for our development has been skewed almost exclusively towards a heavy dependence on our extractive activities and consequently our economic fortunes continue to be dictated largely by fluctuations in the commodities market over which we have absolutely no control.”
Due to the lopsidedness of their model, African countries do not have any control over the prices of their valuable minerals.
The main problem was that the domestic market for mining goods and services was fragmented, worsened by onerous national boundaries.
“It is imperative for countries to find ways to not only link the market, but also consolidate the demand for various supplies,” Akweshie suggested.
Elaborating further, he said, “With a continental market that is artificially segmented by so many national boundaries, we need to create another supply centre outside of South Africa to cater for the “far-away places” to ensure that gold mining operations in Ghana, Mali, Tanzania, the Democratic Republic of Congo and Zimbabwe receive the same quality of inputs and services as the ones in South Africa.”
Akweshie said he believed that one of the ways by which countries could ensure long-term sustainability of the mining industry was through growing domestic demand for mining goods and services.
He explained that he viewed the Africa Mining Vision, which is a blueprint adopted by the African Union several years ago, was a step in the right direction as it attempted to derive more socioeconomic benefits from minerals across the continent.